Budget FY2023 to accelerate the growth of the start-ups: Sagun Arora
3 min read . Updated: 24 Jan 2023, 08:31 PM IST
PremiumThe e-commerce market may have a positive attitude toward the budget if it includes measures that promote ease of doing business, such as simplification of regulations and tax breaks
India is a top commercial destination in the globe, and one of its key advantages is its entrepreneurship. In order to take their ideas from the concept stage to the market stage, start-ups primarily struggle to secure money and credibility in the marketplace. Because of the tremendous initiatives taken to develop our country, the Union Budget 2022–23 of the largest democracy in the world will always be remembered as a revolutionary ‘Budget’.
Depending on a number of variables, including local policies, international economic conditions, and foreign events, the Indian economy's growth in 2023 may prove to be rather difficult. However, according to the International Monetary Fund (IMF), India's real GDP increased in 2022 more quickly than2021. This increase in GDP was attributed to India's robust domestic demand and a pickup in investment and manufacturing activity. This has altered, though, as a result of the COVID-19 epidemic, the price of energy, and international economic connections. Long-term economic growth has been fostered by ‘Make in India’, ‘Digital India’, and ‘Start-up India’ policies and programmes of the Indian government.
The start-up ecosystem in India has been expanding quickly in the recent years as a result of a variety of government initiatives and laws as well as an increase in the number of profitable firms. With the launch of many programmes by the Government of India, such as ‘Start-up India’, ‘Digital India’, and ‘Make in India’, the economy is encouraged to support entrepreneurship and ease of doing business.
Start-ups have been significantly influenced by the budget. The procedures and rules outlined in the budget are what determine how a start-up is born and operates. In general, policies that encourage entrepreneurship and ease of doing business, such as tax incentives, support for research and development, and regulatory simplification, may have a favourable impact on start-ups.
However, policies that have raised taxes or compliance requirements might have had a detrimental effect. In 2022, the Union budget had its own effects on the retail sector due to things like consumer spending, governmental policy, and the overall health of the economy. However, a burgeoning middle class and rising consumer spending in 2022 helped the retail sector maintain its development track. With the increase in online buying that has occurred during the pandemic, the e-commerce retail sector has also expanded.
All being said, the retail industry encountered some difficulties in the past year, including rising expenses, heightened competition, and shifting consumer preferences. The retail sector was significantly impacted by government initiatives and laws including FDI in retail and GST, among others. Overall, the retail industry in 2022 was one that was competitive, active, and focused on expansion.
The e-commerce industry did, however, encounter a number of difficulties, including escalating competition, shifting consumer preferences, and the pressure to adhere to rules.
The GOI's relaxation of FDI restrictions and simplification of GST regulations for e-commerce platforms increased international investment in the industry. This improved the finance options for e-commerce businesses, especially for small and medium-sized businesses. Venture capital (VC) and private equity (PE) companies have also kept funding e-commerce entrepreneurs in 2022, in addition to international investment. These companies were drawn in by the e-commerce industry's great development potential and scalability.
The Indian government's Start-up India programme, which has offered funding choices for companies, is anticipated to continue in 2023.
In general, the e-commerce market may have a positive attitude toward the budget if it includes measures that promote ease of doing business, such as simplification of regulations and tax breaks. However, it may be challenging to analyse the sentiments of the e-commerce market towards the Budget 2023. The e-commerce industry may favour the policies that assist the development of digital infrastructure, such as investment in internet connectivity and data analytics, which might support the expansion of small and medium-sized businesses.
On the other hand, policies that burden e-commerce businesses with more taxes or compliance standards may not be well embraced by the market. The e-commerce market will closely monitor the Budget 2023 and the measures that have been announced, and their reaction will reflect on how the budget addresses the opportunities and challenges that the e-commerce sector faces.
Sagun Arora, Co-founder, Filmy Vastra